Is the cost of pet insurance for dogs in the UK increasing?

Owning a dog is a costly endeavour, and the majority of first-time dog owners greatly underestimate how much it all adds up to on a month by month basis too.

Even things like food, toys, flea and worming treatments and all the little incidentals that rarely get mentioned can soon make a dent in your bank balance, and the larger your dog, the more each thing you need to buy tends to cost as well.

This is all before you get onto the really hefty dog-related bills like veterinary fees and/or pet insurance for your dog, both of which can be very expensive and are of course closely connected.

Dog insurance is quite a polarising topic too, for many reasons. Many dog owners would be simply unable to fund anything other than a very minor unexpected veterinary bill without insurance, and so see it as an essential for responsible dog ownership, which is very conscientious.

Others see it all as something of a con; particularly if their dogs are robustly healthy and they’ve paid into a policy for many years without needing to claim, only to see the policy increase in cost each year and as the dog ages, the level of coverage decrease and the caveats placed on them become ever more complicated and restrictive too.

But is the cost of insurance for dogs in the UK increasing in general? This article will tell you.

Is dog insurance essential if you want to be a responsible dog owner?

When it comes to buying a dog and running the numbers to make sure you could afford their care, working out how you’d fund veterinary fees is a vital part of this, which will often mean exploring dog insurance pricing and options.

Another point to bear in mind is that dog insurance is not just designed to cover accidents and illnesses. Most policies also include third party liability cover, which is very important. This provides protection if your dog were to cause damage to another person’s property, or if they caused an accident, hurt someone, or otherwise left you legally liable for someone else’s out of pocket expenses relating to your dog.

Insuring your dog is a responsible choice to make in regards to both public liability coverage and the knowledge you could pay your vet’s bill, but this does not necessarily mean that opting not to insure your dog is irresponsible by default.

If you could afford a vet’s bill potentially running into thousands (or tens of thousands even, in some cases) of pounds if you had to, either by means of general funds you have or self-insuring by building up an emergency pot of money put to one side for your dog, insurance might not be necessary for you to cover your vet’s bills.

However, if you paid for that one-off treatment and cleared out your funds and had to start building them up again, how would you pay for a second incident, should one happen? Insurance would cover you within the remit of the policy despite the prior claim (assuming you had not reached the policy limit, which is something you should be careful about when comparing costs), but without insurance you’d need to be able to fund the second issue yourself once again.

You also need to think about a worst case scenario with your dog’s public liability insurance and how much this might cost you if something happened that impacted upon someone else; dog insurance public liability coverage usually involves six-figure numbers, and whilst claims in that ballpark are uncommon, they do happen!

Does dog insurance increase in line with the dog’s age?

Virtually all dog insurance policies increase for every year a dog ages, as the older a dog becomes, the greater their chances of a claim. Interestingly, the first year of a dog’s life is also one of the times at which a claim is most likely too, because a lot of hereditary health conditions will present for the first time at this age, and puppies are pretty accident prone compared to older dogs as well.

It is certainly fair to say that when dogs get past a certain age, the cost of their monthly or annual policies can reach figures that for many dog owners, are outside of their financial grasp. Potentially this means that investing in self-insurance by putting those same funds and prior years’ policy payments to one side for emergencies would be much more cost-effective. However, this does only factor in the need to fund one potential one-off problem, not more.

Some insurers won’t even offer coverage for dogs past a certain age at all, and others only for dogs that were already insured by them before they reached this threshold. Others increase the excess for older dogs, or introduce additional rules such as the dog’s owner also having to pay 20% of the total bill, rather than the insurer paying the full cost up to the policy limit in the normal fashion.

Is the annual cost of insuring dogs on the rise in general, aside from age-related increases?

Whatever your views on dog insurance, however, for many dog owners there is little choice to be had in terms of taking out a policy because failing to do so would mean that they’d simply be unable to afford veterinary treatment if their dog needed it.

However, whilst you can get a model quote for your theoretical future dog to tell you how much their policy might cost you now, this won’t let you know how much that cost might increase each year, such as what you might be paying for your dog’s insurance in ten years or so.

That said, most people know and expect their dog’s policies to get higher each year, although you cannot always predict by how much; and at certain age thresholds, the cost of insurance tends to jump up by quite a steep hike too, reflecting transitions say, from adulthood to old age.

Even on top of age-related policy changes, data published by the Association of British Insurers (ABI) indicates that the price of the average pet insurance policy in the UK has gone up by 50% in the last decade; but the cost of the average premium has actually gone down in the last couple of years too, albeit this is a one-off rather than part of a trend.

Based on averages that include all insured pet animals and not just dogs (dog insurance policies are invariably higher than those for cats or other pets) the fall reflects just a couple of pounds of difference across an annual policy, from £281 in 2017 and £279 in 2018, and so is not a huge difference either!

As noted, this should not be viewed as the average cost of a dog insurance policy, which will almost universally be a lot higher. However, this slight fall in price between 2017 and 2018 remains notable for dogs as well as other pets.

This drop is not something that falls in line with a general trend, as you might expect given the mentioned 50% increase in the average policy cost across the last decade as a whole. The drop between 2017 and 2018 was in fact the first time in eight years that the price fell rather than rose, and so is an anomaly more than a trend.

So, why have pet insurance policies increased by 50% over the last decade?

Insurers cite the rising cost in veterinary fees as the main cause, meaning that the cost of the average pay out is higher, and so the cost of the policy needs to be higher to make it economically viable.

If you are planning on buying a puppy or taking on the responsibility of dog ownership, it would be wise to see that 50% policy increase over ten years as a good benchmark to follow for your budgeting – added, of course, to the age-related policy increase each year you need to factor in too.